ETF Trends
ETF Trends

For the past several weeks, the Tech press has been in a frenzy about ConnectC – you know that merchant payment system that no one had ever heard of before the launch of Apple Pay. And, while many of the articles may be accurate (they seem like they are) as to why merchants are prefer CurrentC, I’ve found that the Disruptor (Apple Pay) vs. Entrenched Interest (Merchants) narrative in articles like this one Forbes   or this one Slate ignore a critical question. Does supporting Apple Pay benefit enough of a retailer’s customers to warrant the investment required to be able to support it. Or, stated more bluntly, if you’re a retailer, do you need Apple Pay?

To illustrate my point, I thought I would view Apple Pay through the lens of the retailer so many people love to hate – Walmart. It has been well documented that Walmart doesn’t invest money into its operations unless it will enable the retailer to drive lower pricing without sacrificing margins. So, forgetting all the innovation hype, does Apple Pay drive enough value to Walmart to warrant an investment in new terminals? Clearly, it doesn’t… yet. And it may not have anything to do with stubbornness or intransigence or fear – it may really just come down to money. As in, right now, it’s not worth it.

Walmart serves 250 million customers per week

This is per the Walmart website. And for the purposes of this post, I’m going to use 250 million as the number of individual shoppers that visit Walmart in a given year. (I’m sure it’s higher, but having the number be higher makes the math more complicated…) If every one of those shoppers has a cell phone (they don’t, but let’s keep the math simple), we’re talking about a total of 250 million mobile phones that visit a Walmart each year. As of today, Apple is approaching worldwide sales of 25 million iPhone 6 & iPhone 6 Pluses sold – including in countries where there are no Walmart stores.  So you can see, even if every iPhone 6 owner shopped at a Walmart, best case scenario, they would account for about 10% of Walmart’s total customer traffic.

Except Walmart customers are probably not iPhone 6 owners

Why is it a best case scenario that Apple Pay would account for 10% of Walmart customers? Well, consider Walmart’s customer demographic.

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